MW: Oil falls for first day in nine; traders await inventories data
By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) -- Crude-oil futures edged lower Tuesday, easing from their highest level in 14 months and pulling back for the first session in nine, as energy traders await petroleum data expected to show U.S. crude inventories rose last week.
Also on the radar are pending home sales and factory orders data, which could give further indications of the status of the U.S. economy.
Crude for February delivery was last down 0.1% at $81.41 a barrel on the New York Mercantile Exchange. It rallied 12% in the past eight sessions to end Monday's trading at the highest level since October.
"The rally in the past days is pushed by investors looking for economic recovery," said James Williams, an economist at energy research firm WTRG Economics. "If this week's inventories data show weak demand, oil could pull back."
The American Petroleum Institute will release its report later this afternoon, while the Energy Information Administration will report its data Wednesday at 10:30 am Eastern Time.
Crude inventories are expected to rise 200,000 barrels in the week ended Jan. 1, according to analysts polled by Dow Jones Newswires. Gasoline stocks are expected to rise 500,000 barrels.
Distillate stocks, including diesel and heating oil, are projected to fall by 2 million barrels, as a U.S. cold snap increases demand for heating oil.
Other analysts have different forecasts. Those surveyed by Platts, for example, expect a drop of 1.6 million barrels in crude inventories.
Crude had been on the rise in the past few sessions as economic indicators showed an upbeat picture in the global economy. The latest data on Monday showed manufacturers increasing production, raising hopes that demand for oil could rise.
Some of the gains in oil prices also came as investors reallocated their positions, analysts said.
"Apparently, institutional investors made their asset-allocation decisions at the end of the old or right at the start of the new year, and positioned themselves on the commodities market," said Commerzbank analyst Carsten Fritsch in a note.
In other energy trading, February gasoline rose 0.3% to $2.1098 a gallon and February heating oil added 0.1% to $2.1915 a gallon, while February natural gas lost 1.2% to $5.816.
The United States Oil Fund (USO 40.26, -0.01, -0.03%) sank 0.3%, and the United States Natural Gas Fund (UNG 10.52, -0.12, -1.14%) lost 1.1%.
